Section 194N: TDS on payment of Certain payments in Cash (Applicable from September 1, 2019)

♦ Who is Deductor of Tax under Section 194M:

Every person, being, —

(i) a banking company to which the Banking Regulation Act, 1949 (10 of 1949) applies (including any bank or banking institution referred to in section 51 of that Act);

(ii) a co-operative society engaged in carrying on the business of banking; or

(iii) a post office

♦ Who is Deductee under Section 194M:

Any person other than following

(i) the Government;

(ii) any banking company or co-operative society engaged in carrying on the business of banking or a post office;

(iii) any business correspondent of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the guidelines issued in this regard by the Reserve Bank of India under the Reserve Bank of India Act, 1934 (2 of 1934);

(iv) any white label automated teller machine operator of a banking company or co-operative society engaged in carrying on the business of banking, in accordance with the authorisation issued by the Reserve Bank of India under the Payment and Settlement Systems Act, 2007 (51 of 2007);

(v) such other person or class of persons, which the Central Government may, by notification in the Official Gazette, specify in consultation with the Reserve Bank of India.

♦ When TDS is deductible under Section 194M:

At the time of payment in Cash from bank/postoffice

There are certain categories of person (payee) to whom the provision of this section will not apply. They are listed below:

• Any government body
• Any bank including co-operative banks
• Any business correspondent of a banking company (including co-operative banks)
• Any white label ATM operator of any bank (including co-operative banks)

♦ Transactions Covered under Section 194M:

Payments in Cash by Banking company or Co-operative bank or a post office. (That is nothing but withdrawing Cash from Banking company or Co-operative bank or a post office)

♦ Threshold Limit for Tax deduction under Section 194M:

is 1 Crore. i.e aggregate of sums, in cash, in excess of one crore rupees during the previous year, to any person from one or more accounts maintained by the recipient.

♦ Rate of Tax deduction under Section 194M:

Tax is deductible at the rate of 2 percentage of payment (or Aggregate of payment) in cash exceeding Rs. 1 Crore.

♦ Lower TDS Certificate:

Not Possible